L Brands (LB) Stock Gets Rating Downgrade at JPMorgan

L Brands (LB) was downgraded to 'neutral' from 'overweight' at JPMorgan.
By Amanda Schiavo ,

NEW YORK (TheStreet) -- L Brands (LB) - Get Report was downgraded to "neutral" from "overweight" at JPMorgan on Monday morning.

The firm lowered its rating on the operator of specialty retail businesses based on a valuation call. The stock is up 37% over the past year, The Fly reports.

However, JPMorgan did up its price target on the stock to $100 from its previous $95 price target.

Unfavorable apparel trends within the industry also led to the downgrade, CNBC.com reports.

L Brands stock is flat in pre-market trading this morning. Shares closed up by 0.03% to $96.91 on Friday afternoon.

Based in Columbus, OH, L Brands is a specialty retailer of women's intimate and other apparel, beauty and personal care products and accessories. The company is the parent of the Bath & Body Works and Victoria's Secret stores.

Separately, TheStreet Ratings team rates L BRANDS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate L BRANDS INC (LB) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 32.64% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LB should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • L BRANDS INC has improved earnings per share by 7.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, L BRANDS INC increased its bottom line by earning $3.49 versus $3.05 in the prior year. This year, the market expects an improvement in earnings ($3.75 versus $3.49).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 8.0% when compared to the same quarter one year prior, going from $188.00 million to $203.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 44.38% is the gross profit margin for L BRANDS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.34% trails the industry average.
  • You can view the full analysis from the report here: LB

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

Loading ...